6-K

Securities and Exchange Commission

Washington, D.C. 20549

 

 

Form 6-K

 

 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d/16

of the Securities Exchange Act of 1934

August 2017

 

AEGON N.V.

 

Aegonplein 50

2591 TV THE HAGUE

The Netherlands


Aegon’s condensed consolidated interim financial statements 2Q 2017, dated August 9, 2017, are included as appendix and incorporated herein by reference.

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

   

AEGON N.V.

 

   

 

   

 

(Registrant)

Date: August 10, 2017     By  

/s/ J.H.P.M. van Rossum

      J.H.P.M. van Rossum
      Head of Corporate Financial Center


LOGO


 

 

Condensed Consolidated Interim Financial Statements 2Q 2017  

 

 

1  

 

 

Table of contents

 

Condensed consolidated income statement

     2  

Condensed consolidated statement of comprehensive income

     3  

Condensed consolidated statement of financial position

     4  

Condensed consolidated statement of changes in equity

     5  

Condensed consolidated cash flow statement

     6  

Notes to the Condensed consolidated interim financial statements

     7  

 

Unaudited

  LOGO


 

2

 

 

 

Condensed consolidated income statement

 

                                       
EUR millions    Notes      2Q 2017      2Q 2016      YTD 2017      YTD 2016  
     

Premium income

            5,770         5,702         11,479         11,538   

Investment income

            2,002         2,073         3,866         4,008   

Fee and commission income

        631         597         1,252         1,199   

Other revenues

                                    

Total revenues

        8,407         8,374         16,602         16,749   

Income from reinsurance ceded

            1,994         961         2,745         1,682   

Results from financial transactions

            2,637         4,817         9,332         6,867   

Other income

            318         54         327         55   

Total income

        13,356         14,207         29,006         25,352   
     

Benefits and expenses

            12,541         13,823         27,596         24,724   

Impairment charges / (reversals)

     10         (3)        20         10         60   

Interest charges and related fees

        111         72         205         169   

Other charges

                     682                682   

Total charges

        12,654         14,596         27,815         25,635   
     

Share in profit / (loss) of joint ventures

        38         28         73         59   

Share in profit / (loss) of associates

                                    

Income / (loss) before tax

        746         (362)        1,268         (224)  

Income tax (expense) / benefit

              (217)        (23)        (362)        (17)  

Net income / (loss)

              529         (385)        907         (242)  
     

Net income / (loss) attributable to:

                  

Owners of Aegon N.V.

        529         (385)        907         (242)  

Non-controlling interests

                                    
     

Earnings per share (EUR per share)

     18                   

Basic earnings per common share

        0.24         (0.20)        0.41         (0.15)  

Basic earnings per common share B

        0.01         (0.01)        0.01          

Diluted earnings per common share

        0.24         (0.20)        0.41         (0.15)  

Diluted earnings per common share B

              0.01         (0.01)        0.01          

 

LOGO   Unaudited


 

 

Condensed Consolidated Interim Financial Statements 2Q 2017  

 

 

3  

 

 

Condensed consolidated statement of comprehensive income

 

         
EUR millions    2Q 2017      2Q 2016      YTD 2017      YTD 2016  
     

Net income / (loss)

     529         (385)        907         (242)  
     

Other comprehensive income:

               

Items that will not be recassified to profit or loss:

               

Changes in revaluation reserve real estate held for own use

                           

Remeasurements of defined benefit plans

     16         (591)        282         (1,092)  

Income tax relating to items that will not be reclassified

     (2)        168         (69)        303   
     

Items that may be reclassified subsequently to profit or loss:

               

Gains / (losses) on revaluation of available-for-sale investments

     1,096         2,047         1,563         3,888   

Gains / (losses) transferred to the income statement on disposal and impairment of available-for-sale investments

     (1,044)        (2,115)        (1,123)        (2,145)  

Changes in cash flow hedging reserve

     (759)        523         (755)        827   

Movement in foreign currency translation and net foreign investment hedging reserve

     (1,079)        111         (1,297)        (623)  

Equity movements of joint ventures

                   (6)         

Equity movements of associates

     (1)               (2)         

Income tax relating to items that may be reclassified

     291         (264)        175         (1,027)  

Other

                           

Total other comprehensive income / (loss) for the period

     (1,476)        (116)        (1,228)        145   

Total comprehensive income / (loss)

     (947)        (501)        (322)        (96)  
     

Total comprehensive income / (loss) attributable to:

               

Owners of Aegon N.V.

     (946)        (502)        (321)        (104)  

Non-controlling interests

     (1)               (1)         

 

Unaudited

  LOGO


 

4

 

 

 

Condensed consolidated statement of financial position                        
             June 30,      Dec. 31,  
              2017      2016  
EUR millions    Notes                  
   

Assets

          

Cash and cash equivalents

        12,880         11,347   

Assets held for sale

     24         2,324         8,705   

Investments

     11         140,544         156,813   

Investments for account of policyholders

     12         198,278         203,610   

Derivatives

     14         7,148         8,318   

Investments in joint ventures

        1,666         1,614   

Investments in associates

        272         270   

Reinsurance assets

     13         19,949         11,208   

Deferred expenses

     16         10,565         11,423   

Other assets and receivables

        9,309         10,805   

Intangible assets

     17         1,688         1,820   

Total assets

        404,625         425,935   
   

Equity and liabilities

          

Shareholders’ equity

        20,409         20,913   

Other equity instruments

              3,779         3,797   

Issued capital and reserves attributable to owners of Aegon N.V.

        24,188         24,710   

Non-controlling interests

              23         23   

Group equity

        24,211         24,734   
   

Subordinated borrowings

        765         767   

Trust pass-through securities

        143         156   

Insurance contracts

     19         112,913         119,569   

Insurance contracts for account of policyholders

     20         119,971         120,929   

Investment contracts

     21         17,569         19,572   

Investment contracts for account of policyholders

     22         80,900         84,774   

Derivatives

     14         8,294         8,878   

Borrowings

     23         14,867         13,153   

Liabilities held for sale

     24         2,344         8,816   

Other liabilities

              22,649         24,588   

Total liabilities

             

 

380,414 

 

 

 

    

 

401,201 

 

 

 

Total equity and liabilities

              404,625         425,935   

 

LOGO   Unaudited


 

 

Condensed Consolidated Interim Financial Statements 2Q 2017  

 

 

5  

 

 

Condensed consolidated statement of changes in equity

 

 
EUR millions    Share capital
1
    Retained
earnings
    Revaluation
reserves
    Remeasurement
of defined benefit
plans
    Other
reserves
    Other equity
instruments
    Issued
capital and
reserves 2
    Non-
controlling
interests
    Total  
       

Six months ended June 30, 2017

                        
       

At beginning of year

     8,193       7,812       5,381       (1,820     1,347       3,797       24,710       23       24,734  
       

Net income / (loss) recognized in the income statement

     -       907       -       -       -       -       907       -       907  
       

Other comprehensive income:

                        

Items that will not be reclassified to profit or loss:

                        

Changes in revaluation reserve real estate held for own use

     -       -       1       -       -       -       1       -       1  

Remeasurements of defined benefit plans

     -       -       -       282       -       -       282       -       282  

Income tax relating to items that will not be reclassified

     -       -       -       (69     -       -       (69     -       (69
       

Items that may be reclassified subsequently to profit or loss:

                        

Gains / (losses) on revaluation of available-for-sale investments

     -       -       1,563       -       -       -       1,563       -       1,563  

Gains / (losses) transferred to income statement on disposal and impairment of available-for-sale investments

     -       -       (1,123     -       -       -       (1,123     -       (1,123

Changes in cash flow hedging reserve

     -       -       (755     -       -       -       (755     -       (755

Movement in foreign currency translation and net foreign investment hedging reserves

     -       -       (250     61       (1,108     -       (1,297     -       (1,297

Equity movements of joint ventures

     -       -       -       -       (6     -       (6     -       (6

Equity movements of associates

     -       -       -       -       (2     -       (2     -       (2

Income tax relating to items that may be reclassified

     -       -       128       -       47       -       175       -       175  

Other

     -       5       -       -       -       -       5       (1     5  

Total other comprehensive income

 

     -       5       (437     274       (1,070     -       (1,228     (1     (1,228

Total comprehensive income / (loss) for 2017

     -       912       (437     274       (1,070     -       (321     (1     (322
       

Issuance and purchase of (treasury) shares

     -       142       -       -       -       -       142       -       142  

Dividends paid on common shares

     (122     (143     -       -       -       -       (265     -       (265

Coupons on non-cumulative subordinated notes

     -       (15     -       -       -       -       (15     -       (15

Coupons on perpetual securities

     -       (49     -       -       -       -       (49     -       (49

Incentive plans

     -       4       -       -       -       (19     (15     -       (15

At end of period

     8,071       8,663       4,944       (1,546     278       3,779       24,188       23       24,211  
       

Six months ended June 30, 2016

                        
       

At beginning of year

     8,387       8,075       6,471       (1,532     1,283       3,800       26,485       9       26,494  
       

Net income / (loss) recognized in the income statement

     -       (242     -       -       -       -       (242     -       (242
       

Other comprehensive income:

                        

Items that will not be reclassified to profit or loss:

                        

Changes in revaluation reserve real estate held for own use

     -       -       2       -       -       -       2       -       2  

Remeasurements of defined benefit plans

     -       -       -       (1,092     -       -       (1,092     -       (1,092

Income tax relating to items that will not be reclassified

     -       -       (1     303       -       -       303       -       303  
       

Items that may be reclassified subsequently to profit or loss:

                        

Gains / (losses) on revaluation of available-for-sale investments

     -       -       3,888       -       -       -       3,888       -       3,888  

Gains / (losses) transferred to income statement on disposal and impairment of available-for-sale investments

     -       -       (2,145     -       -       -       (2,145     -       (2,145

Changes in cash flow hedging reserve

     -       -       827       -       -       -       827       -       827  

Movement in foreign currency translation and net foreign investment hedging reserves

     -       -       (145     48       (526     -       (623     -       (623

Equity movements of joint ventures

     -       -       -       -       4       -       4       -       4  

Equity movements of associates

     -       -       -       -       1       -       1       -       1  

Income tax relating to items that may be reclassified

     -       -       (1,020     -       (7     -       (1,027     -       (1,027

Other

     -       (1     -       -       -       -       (1     8       7  

Total other comprehensive income

     -       (1     1,406       (741     (527     -       138       8       145  
       

Total comprehensive income / (loss) for 2016

     -       (243     1,406       (741     (527     -       (104     8       (96
       

Shares issued

     1       -       -       -       -       -       1       -       1  

Issuance and purchase of (treasury) shares

     -       (295     -       -       -       -       (295     -       (295

Dividends paid on common shares

     (80     (151     -       -       -       -       (231     -       (231

Coupons on non-cumulative subordinated notes

     -       (14     -       -       -       -       (14     -       (14

Coupons on perpetual securities

     -       (50     -       -       -       -       (50     -       (50

Incentive plans

     -       (10     -       -       -       (16     (26     -       (26

At end of period

     8,308       7,313       7,878       (2,273     755       3,784       25,766       17       25,782  

1 For a breakdown of share capital please refer to note 18.

2 Issued capital and reserves attributable to owners of Aegon N.V.

 

Unaudited

  LOGO


 

6

 

 

 

Condensed consolidated cash flow statement

 

               
EUR millions    YTD 2017      YTD 2016  
   

Cash flow from operating activities

     728         2,631   
   

Purchases and disposals of intangible assets

     (4)        (13)  

Purchases and disposals of equipment and other assets

     (36)        (28)  

Purchases and disposals of businesses and subsidiaries

     (1,021)        (787)  

Purchases, disposals and dividends joint ventures and associates

     (4)        62   

Cash flow from investing activities

     (1,066)        (766)  
   

Issuance of treasury shares

             

Purchase of treasury shares

            (402)  

Dividends paid

     (143)        (151)  

Issuances, repurchases and coupons of perpetuals

     (65)        (67)  

Issuances, repurchases and coupons of non-cumulative subordinated notes

     (19)        (19)  

Issuances and repayments of borrowings

     2,231         (221)  

Cash flow from financing activities

     2,005         (859)  
   

Net increase / (decrease) in cash and cash equivalents

     1,668         1,006   

Net cash and cash equivalents at January 1

     11,347         9,593   

Effects of changes in foreign exchange rates

     (138)        (131)  

Net cash and cash equivalents at end of period

     12,876         10,468   

    

                 
   

Cash and cash equivalents

     12,880         10,482   

Cash and cash equivalents classified as Assets held for sale

             

Bank overdrafts classified as other liabilities

     (4)        (14)  

Net cash and cash equivalents

     12,876         10,468   

 

LOGO   Unaudited


 

 

Condensed Consolidated Interim Financial Statements 2Q 2017  

 

 

7  

 

 

Notes to the Condensed consolidated interim financial statements

Amounts in EUR millions, unless otherwise stated

Aegon N.V., incorporated and domiciled in the Netherlands, is a public limited liability company organized under Dutch law and recorded in the Commercial Register of The Hague under number 27076669 and with its registered address at Aegonplein 50, 2591 TV, The Hague, the Netherlands. Aegon N.V. serves as the holding company for the Aegon Group and has listings of its common shares in Amsterdam and New York.

Aegon N.V. (or ‘the Company’) and its subsidiaries (‘Aegon’ or ‘the Group’) have life insurance and pensions operations in more than 20 countries in the Americas, Europe and Asia and are also active in savings and asset management operations, accident and health insurance, general insurance and to a limited extent banking operations. Headquarters are located in The Hague, the Netherlands. The Group employs over 29,000 people worldwide.

1. Basis of presentation

The condensed consolidated interim financial statements as at and for the period ended, June 30, 2017, have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’, as adopted by the European Union (hereafter ‘IFRS’). They do not include all of the information required for a full set of financial statements prepared in accordance with IFRS and should therefore be read together with the 2016 consolidated financial statements of Aegon N.V. as included in Aegon’s Annual Report for 2016. Aegon’s Annual Report for 2016 is available on its website (aegon.com).

The condensed consolidated interim financial statements have been prepared in accordance with the historical cost convention as modified by the revaluation of investment properties and those financial instruments (including derivatives) and financial liabilities that have been measured at fair value. Certain amounts in prior periods may have been reclassified to conform to the current year presentation. These reclassifications had no effect on net income, shareholders’ equity or earnings per share. The condensed consolidated interim financial statements as at, and for the period ended June 30, 2017, were approved by the Executive Board on August 9, 2017.

The condensed consolidated interim financial statements are presented in euro (EUR) and all values are rounded to the nearest million unless otherwise stated. The consequence is that the rounded amounts may not add up to the rounded total in all cases.

The published figures in these condensed consolidated interim financial statements are unaudited.

 

Unaudited

  LOGO


 

8

 

 

 

2. Significant accounting policies

All accounting policies and methods of computation applied in the condensed consolidated interim financial statements are the same as those applied in the 2016 consolidated financial statements.

New IFRS accounting standards effective

The following standards, interpretations, amendments to standards and interpretations became effective in 2017, but have not yet been endorsed by the European Union:

 

  

IAS 7 Amendment Disclosure Initiative;

 

  

IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses; and

 

  

Annual improvements 2014-2016 Cycle.

None of these revised standards and interpretations will significantly impact the financial position or the condensed consolidated interim financial statements.

For a complete overview of IFRS standards, published before January 1, 2017, that will be applied in future years, and were not early adopted by the Group, please refer to Aegon’s Annual Report for 2016.

Future adoption of IFRS accounting standards

The IASB has issued IFRS 17 Insurance Contracts. IFRS 17 will be mandatorily effective for annual reporting periods beginning on or after January 1, 2021. It aims to provide a more consistent accounting model for insurance contracts among entities issuing insurance contracts globally. IFRS 17, together with IFRS 9 Financial Instruments, will fundamentally change the accounting in IFRS financial statements of insurance companies. Aegon has started its implementation project on both standards. Aegon expects the impact of the standards to be significant.

The endorsement process of the European Union of the new standard is expected to start in 2017. A final endorsement decision is not expected to be made in 2017.

Taxes

Taxes on income for the three month period, ended June 30, 2017, are calculated using the tax rate that is estimated to be applicable to total annual earnings.

Judgments and critical accounting estimates

Preparing the condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions, including the likelihood, timing or amount of future transactions or events, that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from the estimates made.

In preparing the condensed consolidated interim financial statements, significant judgments made by management in applying the Group’s accounting policies and the key sources of estimating uncertainty were not significantly different than those that were applied to the consolidated financial statements as at and for the year ended December 31, 2016.

 

LOGO   Unaudited


 

 

Condensed Consolidated Interim Financial Statements 2Q 2017  

 

 

9  

 

 

Exchange rates

Assets and liabilities are translated at the closing rates on the reporting date. Income, expenses and capital transactions (such as dividends) are translated at average exchange rates or at the prevailing rates on the transaction date, if more appropriate. The following exchange rates are applied for the condensed consolidated interim financial statements:

Closing exchange rates

         
                       USD       GBP  
         

June 30, 2017

     1           EUR           1.1406       0.8781  
         

December 31, 2016

     1           EUR           1.0548           0.8536  

 

Weighted average exchange rates

 

 
         
                       USD       GBP  
         

Six months ended June 30, 2017

     1       EUR       1.0822       0.8596  
         

Six months ended June 30, 2016

     1       EUR       1.1160       0.7784  

3. Segment information

3.1 Income statement

 

EUR millions    Americas     The
Netherlands
    United
Kingdom
    Central &
Eastern
Europe
    Spain &
Portugal
    Europe     Asia     Asset
Management
   

Holding and
other

activities

    Eliminations     Segment
total
    Joint
ventures and
associates
eliminations
    Consolidated  

Three months ended June 30, 2017

                            
       

Underlying earnings before tax

     341       136       35       19       5       195       11       32       (44     -       535       17       551  

Fair value items

     (33     (138     (27     -       -       (165     (1     -       8       -       (191     (25     (216

Realized gains / (losses) on investments

     19       85       3       1       -       89       2       -       -       -       111       (3     108  

Impairment charges

     (6     (5     -       (2     -       (7     -       -       -       -       (12     -       (12

Impairment reversals

     10       4       -       -       -       4       -       -       -       -       14       -       14  

Other income / (charges)

     228       (8     72       -       -       64       -       (1     -       -       291       -       291  

Run-off businesses

     10       -       -       -       -       -       -       -       -       -       10       -       10  

Income / (loss) before tax

     570       74       83       18       5       180       12       32       (36     -       757       (11     746  

Income tax (expense) / benefit

     (171     (15     (26     (2     (2     (45     (13     (10     9       -       (228     11       (217

Net income / (loss)

     399       59       57       16       3       135       (1     22       (27     -       529       -       529  

Inter-segment underlying earnings

     (17     (29     (25     (3     -       (57     (1     57       18            
       

Revenues

                            

Life insurance gross premiums

     1,866       359       2,587       101       51       3,098       227       -       2       (2     5,191       (133     5,058  

Accident and health insurance

     559       30       8       -       1       40       22       -       -       -       621       (2     619  

General insurance

     -       37       -       56       25       119       -       -       -       -       118       (25     93  

Total gross premiums

     2,425       427       2,595       157       78       3,257       249       -       2       (3     5,930       (160     5,770  

Investment income

     838       569       524       12       9       1,114       60       1       77       (76     2,014       (11     2,002  

Fee and commission income

     406       88       60       10       4       162       14       147       -       (59     670       (39     631  

Other revenues

     1       -       -       -       2       3       -       -       1       -       5       (1     4  

Total revenues

     3,670       1,084       3,180       179       93       4,536       322       148       81       (137     8,619       (212     8,407  

Inter-segment revenues

     -       -       -       -       -       -       1       59       78                                  

 

EUR millions    Americas     The
Netherlands
    United
Kingdom
    Central &
Eastern
Europe
    Spain &
Portugal
    Europe     Asia     Asset
Management
   

Holding and
other

activities

    Eliminations     Segment
total
    Joint
ventures and
associates
eliminations
    Consolidated  

Three months ended June 30, 2016

                            
       

Underlying earnings before tax

     270       138       7       14       -       160       1       37       (35     2       435       4       439  

Fair value items

     (107     (185     (6     -       -       (190     (7     -       (54     -       (358     (9     (367

Realized gains / (losses) on investments

     4       93       131       -       (1     223       1       1       -       -       229       (2     227  

Impairment charges

     (23     (8     -       -       -       (8     -       -       (3     -       (35     -       (35

Impairment reversals

     8       4       -       -       -       4       -       -       -       -       12       -       12  

Other income / (charges)

     41       (20     (681     -       -       (701     -       -       4       -       (656     -       (656

Run-off businesses

     18       -       -       -       -       -       -       -       -       -       18       -       18  

Income / (loss) before tax

     211       22       (548     14       -       (512     (5     38       (88     2       (355     (7     (362

Income tax (expense) / benefit

     (40     (4     14       (3     (2     6       (5     (14     22       -       (30     7       (23

Net income / (loss)

     171       19       (533     11       (3     (506     (10     24       (66     2       (385     -       (385

Inter-segment underlying earnings

     (46     (27     (23     (4     -       (53     19       58       23            
       

Revenues

                            

Life insurance gross premiums

     1,798       358       2,516       100       47       3,021       278       -       1       (21     5,077       (102     4,975  

Accident and health insurance

     553       30       8       -       -       39       23       -       3       (1     616       (2     615  

General insurance

     -       69       -       43       25       137       -       -       -       -       137       (25     112  

Total gross premiums

     2,350       458       2,524       144       72       3,197       301       -       4       (22     5,831       (129     5,702  

Investment income

     900       551       555       11       10       1,127       56       1       101       (100     2,085       (12     2,073  

Fee and commission income

     406       89       22       9       4       123       15       155       -       (59     641       (44     597  

Other revenues

     1       -       -       -       1       1       1       -       1       -       3       (1     2  

Total revenues

     3,658       1,098       3,101       164       86       4,448       372       156       106       (181     8,560       (185     8,374  

Inter-segment revenues

     -       -       -       -       -       -       19       59       102                                  

 

Unaudited

  LOGO


 

10

 

 

 

EUR millions    Americas     The
Netherlands
   

United

Kingdom

   

Central &
Eastern

Europe

    Spain &
Portugal
    Europe     Asia     Asset
Management
    Holding and
other
activities
    Eliminations    

Segment

total

   

 

Joint
ventures and
associates
eliminations

    Consolidated  

Six months ended June 30, 2017

                            
       

Underlying earnings before tax geographically

     653       254       68       36       6       364       23       69       (88     1       1,022       25       1,048  

Fair value items

     (53     (173     (48     -       -       (221     -       -       30       -       (244     (47     (291

Realized gains / (losses) on investments

     29       147       6       2       -       156       (1     2       -       -       187       (3     183  

Impairment charges

     (11     (12     -       (3     -       (14     -       -       (2     -       (28     -       (28

Impairment reversals

     12       7       -       -       -       7       -       -       -       -       19       -       19  

Other income / (charges)

     226       (8     80       -       -       72       -       (1     -       -       297       -       297  

Run-off businesses

     41       -       -       -       -       -       -       -       -       -       41       -       41  

Income / (loss) before tax

     897       215       107       36       6       363       22       71       (60     1       1,294       (25     1,268  

Income tax (expense) / benefit

     (257     (45     (44     (5     (4     (98     (26     (22     15       -       (387     25       (362

Net income / (loss)

     641       170       63       31       2       265       (4     49       (45     1       907       -       907  

Inter-segment underlying earnings

     (36     (59     (47     (6     (1     (113     (2     114       37            
       

Revenues

                            

Life insurance gross premiums

     3,832       1,052       4,474       203       105       5,835       552       -       4       (5     10,217       (327     9,890  

Accident and health insurance

     1,122       140       16       1       83       240       55       -       -       -       1,417       (15     1,402  

General insurance

     -       77       -       110       49       237       -       -       1       (1     237       (49     187  

Total gross premiums

     4,954       1,270       4,490       314       237       6,312       607       -       4       (5     11,871       (392     11,479  

Investment income

     1,810       1,117       796       24       18       1,955       125       2       156       (154     3,893       (28     3,866  

Fee and commission income

     802       175       122       20       7       324       30       300       -       (118     1,336       (84     1,252  

Other revenues

     2       -       -       -       3       3       -       -       2       -       8       (2     5  

Total revenues

     7,567       2,561       5,409       357       266       8,593       762       301       162       (277     17,108       (506     16,602  

Inter-segment revenues

     -       -       -       -       -       -       2       118       157                                  

 

EUR millions    Americas     The
Netherlands
   

United

Kingdom

   

Central &
Eastern

Europe

    Spain &
Portugal
    Europe     Asia     Asset
Management
    Holding and
other
activities
    Eliminations    

Segment

total

   

 

Joint
ventures and
associates
eliminations

    Consolidated  

Six months ended June 30, 2016

                            
       

Underlying earnings before tax geographically

     554       267       30       29       3       330       1       82       (72     2       897       10       907  

Fair value items

     (327     (289     28       -       -       (261     (5     -       (123     -       (716     (22     (737

Realized gains / (losses) on investments

     37       111       132       (1     (2     240       5       1       -       -       283       (3     280  

Impairment charges

     (57     (14     -       2       -       (12     (1     -       (7     1       (76     -       (76

Impairment reversals

     10       8       -       -       -       8       -       -       -       (1     17       -       17  

Other income / (charges)

     35       (20     (680     -       -       (700     -       -       4       -       (662     -       (662

Run-off businesses

     47       -       -       -       -       -       -       -       -       -       47       -       47  

Income / (loss) before tax

     298       63       (490     30       2       (395     1       82       (198     2       (210     (14     (224

Income tax (expense) / benefit

     (33     (11     8       (5     (4     (12     (10     (26     48       -       (32     14       (17

Net income / (loss)

     266       52       (482     25       (2     (407     (9     56       (150     2       (242     -       (242

Inter-segment underlying earnings

     (95     (50     (47     (8     -       (105     37       119       43            
       

Revenues

                            

Life insurance gross premiums

     3,568       1,217       4,531       198       96       6,041       576       -       2       (42     10,146       (273     9,874  

Accident and health insurance

     1,100       151       19       1       72       243       56       -       7       (3     1,403       (13     1,390  

General insurance

     -       184       -       90       48       321       -       -       -       -       321       (48     273  

Total gross premiums

     4,668       1,551       4,550       288       216       6,605       632       -       9       (44     11,871       (333     11,538  

Investment income

     1,816       1,074       985       22       20       2,101       112       2       205       (203     4,033       (25     4,008  

Fee and commission income

     824       175       45       18       7       245       29       323       -       (123     1,297       (98     1,199  

Other revenues

     2       -       -       -       1       1       1       -       1       -       5       (1     4  

Total revenues

     7,310       2,800       5,581       328       243       8,951       775       325       215       (370     17,206       (457     16,749  

Inter-segment revenues

     -       1       -       -       -       1       39       124       207                                  

3.2 Performance measure

Aegon’s segment information is prepared by consolidating on a proportionate basis Aegon’s joint ventures and associated companies.

Performance measure

A non-IFRS performance measure of reporting segments utilized by the Company is underlying earnings before tax. Underlying earnings before tax reflects Aegon’s profit from underlying business operations and excludes components that relate to accounting mismatches that are dependent on market volatility, updates to best estimate actuarial and economic assumptions and model updates or events that are considered outside the normal course of business. Note that, as disclosed in the 2016 Annual Report, Aegon changed the measurement of underlying earnings before tax to exclude the impact of actuarial assumption updates. In addition, updates to economic assumptions previously recorded in fair value items, are recorded in Other income / (charges). These changes resulted in a shift of EUR 20 million (negative) in The Netherlands from Fair value items to Other income/charges in the 2Q 2016 numbers.

Aegon believes that its non-IFRS performance measure, underlying earnings before tax, provides meaningful supplemental information about the underlying results of Aegon’s business, including insight into the financial measures that Aegon’s senior management uses in managing the business. Among other things, Aegon’s senior management is compensated based in part on Aegon’s results against targets using underlying earnings before tax. While many other insurers in Aegon’s peer group present substantially similar performance measures, the performance measures presented in this document may nevertheless differ from the performance measures presented by other insurers. There is no standardized meaning to these measures under IFRS or any other recognized set of accounting standards.

 

LOGO   Unaudited


 

 

Condensed Consolidated Interim Financial Statements 2Q 2017  

 

 

11  

 

 

The reconciliation from underlying earnings before tax to income before tax, being the most comparable IFRS measure, is presented in the tables in this note.

The items that are excluded from underlying earnings before tax as described further below are: fair value items, realized gain or losses on investments, impairment charges/reversals, other income or charges, run-off businesses and share in earnings of joint ventures and associates.

Fair value items

Fair value items include the over- or underperformance of investments and guarantees held at fair value for which the expected long-term return is included in underlying earnings before tax.

In addition, hedge ineffectiveness on hedge transactions, fair value changes on economic hedges without natural offset in earnings and for which no hedge accounting is applied and fair value movements on real estate are included under fair value items.

Certain assets held by Aegon are carried at fair value and managed on a total return basis, with no offsetting changes in the valuation of related liabilities. These include assets such as investments in hedge funds, private equities, real estate (limited partnerships), convertible bonds and structured products. Underlying earnings before tax exclude any over- or underperformance compared to management’s long-term expected return on assets. Based on current holdings and asset returns, the long-term expected return on an annual basis is 8-10%, depending on asset class, including cash income and market value changes. The expected earnings from these asset classes are net of deferred policy acquisition costs (DPAC) where applicable.

In addition, certain products offered by Aegon Americas contain guarantees and are reported on a fair value basis and the total return annuities and guarantees on variable annuities. The earnings on these products are impacted by movements in equity markets and risk-free interest rates. Short-term developments in the financial markets may therefore cause volatility in earnings. Included in underlying earnings before tax is a long-term expected return on these products and excluded is any over- or underperformance compared to management’s expected return.

The fair value movements of certain guarantees and the fair value change of derivatives that hedge certain risks on these guarantees of Aegon the Netherlands, VA Europe (included in United Kingdom) and Japan are excluded from underlying earnings before tax, and the long-term expected return for these guarantees is set at zero. In addition, fair value items include market related results on our loyalty bonus reserves in the United Kingdom. The value of these reserves are directly related to policyholder investments which value is directly impacted by movements in equity and bond markets.

Holding and other activities include certain issued bonds that are held at fair value through profit or loss (FVTPL). The interest rate risk on these bonds is hedged using swaps. The fair value movement resulting from changes in Aegon’s credit spread used in the valuation of these bonds are excluded from underlying earnings before tax and reported under fair value items.

Realized gains or losses on investments

Includes realized gains and losses on available-for-sale investments, mortgage loans and other loan portfolios.

 

Unaudited

  LOGO


 

12

 

 

 

Impairment charges/reversals

Impairment charges include impairments on available-for-sale debt securities, shares including the effect of deferred policyholder acquisition costs, mortgage loans and other loan portfolios at amortized cost, joint ventures and associates. Impairment reversals include reversals on available-for-sale debt securities.

Other income or charges

Other income or charges includes: a) items which cannot be directly allocated to a specific line of business; b) the impact of actuarial and economic assumption and model updates used to support calculations of our liabilities for insurance and investment contracts sold to policyholders and related assets; and c) items that are outside the normal course of business, including restructuring charges. In the condensed consolidated interim financial statements, these restructuring charges are included in operating expenses. Actuarial assumption and model updates are recorded in Claims and Benefits in the IFRS income statement.

Run-off businesses

Includes underlying results of business units where management has decided to exit the market and to run-off the existing block of business. Currently, this line includes results related to the run-off of the institutional spread-based business, structured settlements blocks of business, bank-owned and corporate-owned life insurance (BOLI/COLI) business (until April 1, 2017, please refer to note 26 Acquisitions/divestments for more information on the divestment of this business), and the sale of the life reinsurance business in the United States. Aegon has other blocks of business for which sales have been discontinued and of which the earnings are included in underlying earnings before tax.

Share in earnings of joint ventures and associates

Earnings from Aegon’s joint ventures in the Netherlands, Mexico, Spain, Portugal, China and Japan and Aegon’s associates in India, Brazil, the Netherlands, United Kingdom, Mexico and France are reported on an underlying earnings before tax basis.

 

LOGO   Unaudited


 

 

Condensed Consolidated Interim Financial Statements 2Q 2017  

 

 

13  

 

 

3.3 Investments

Amounts included in the tables on investments are presented on an IFRS basis.

 

                                                                                    EUR millions  
June 30, 2017    Americas      The
Netherlands
     United
Kingdom
     Central &
Eastern
Europe
     Spain &
Portugal
     Europe      Asia     

Asset

Management

     Holdings
and other
activities
    Eliminations    

Total

EUR

 

Investments

                                

Shares

     708        629        106        54        5        795        1        2        62       -       1,567  

Debt securities

     57,680        21,338        1,984        671        660        24,653        5,095        -        -       -       87,429  

Loans

     8,955        29,477        -        292        50        29,819        6        -        -       -       38,780  

Other financial assets

     10,114        321        131        7        5        463        -        144        21       -       10,742  

Investments in real estate

     677        1,331        -        3        15        1,349        -        -        -       -       2,026  

Investments general account

     78,134        53,096        2,221        1,028        734        57,079        5,102        146        83       -       140,544  

Shares

     -        9,408        15,199        294        14        24,916        -        -        -       (5     24,910  

Debt securities

     3,399        13,950        9,849        236        9        24,044        -        -        -       -       27,444  

Unconsolidated investment funds

     100,148        -        37,191        880        70        38,142        -        -        -       -       138,290  

Other financial assets

     664        2,634        3,659        7        1        6,301        -        -        -       -       6,965  

Investments in real estate

     -        -        669        -        -        669        -        -        -       -       669  

Investments for account of policyholders

     104,212        25,992        66,567        1,418        94        94,071        -        -        -       (5     198,278  
   

Investments on balance sheet

     182,346        79,088        68,789        2,446        828        151,151        5,102        146        83       (5     338,822  

Off balance sheet investments third parties

     233,375        997        108,455        3,502        531        113,485        2,733        129,530        -       (1,031     478,093  

Total revenue generating investments

     415,722        80,085        177,243        5,948        1,360        264,636        7,835        129,676        83       (1,037     816,915  

Investments

                                

Available-for-sale

     63,318        20,784        2,115        717        669        24,286        5,074        142        21       -       92,842  

Loans

     8,955        29,477        -        292        50        29,819        6        -        -       -       38,780  

Financial assets at fair value through profit or loss

     109,396        27,496        66,004        1,433        94        95,028        22        4        62       (5     204,506  

Investments in real estate

     677        1,331        669        3        15        2,018        -        -        -       -       2,694  

Total investments on balance sheet

     182,346        79,088        68,789        2,446        828        151,151        5,102        146        83       (5     338,822  
   

Investments in joint ventures

     6        931        -        -        493        1,424        128        109        -       -       1,666  

Investments in associates

     92        33        8        2        -        43        19        119        (1     -       272  

Other assets

     36,595        16,533        6,053        296        222        23,089        2,583        285        29,899       (28,602     63,864  

Consolidated total assets

     219,039        96,585        74,849        2,744        1,543        175,707        7,832        659        29,982       (28,608     404,625  

 

                                                                                    EUR millions  
December 31, 2016    Americas      The
Netherlands
     United
Kingdom
     Central &
Eastern
Europe
     Spain &
Portugal
     Europe      Asia      Asset
Management
    

Holdings

and other
activities

    Eliminations    

Total

EUR

 

Investments

                                

Shares

     793        334        84        35        4        457        -        2        62       -       1,314  

Debt securities

     70,766        23,741        2,036        633        683        27,093        5,310        -        -       -       103,169  

Loans

     10,820        28,627        -        303        45        28,975        18        -        -       -       39,812  

Other financial assets

     9,924        358        115        10        -        483        -        88        23       -       10,519  

Investments in real estate

     743        1,238        -        3        15        1,256        -        -        -       -       1,999  

Investments general account

     93,046        54,298        2,236        983        747        58,264        5,328        90        85       -       156,813  

Shares

     -        9,689        15,503        295        13        25,499        -        -        -       (7     25,492  

Debt securities

     4,779        15,434        9,847        235        10        25,526        -        -        -       -       30,305  

Unconsolidated investment funds

     102,534        -        36,600        879        64        37,543        -        -        -       -       140,077  

Other financial assets

     27        2,862        4,150        9        1        7,022        -        -        -       -       7,049  

Investments in real estate

     -        -        686        -        -        686        -        -        -       -       686  

Investments for account of policyholders

     107,341        27,985        66,786        1,418        88        96,276        -        -        -       (7     203,610  
   

Investments on balance sheet

     200,387        82,283        69,021        2,401        834        154,540        5,328        90        85       (7     360,423  

Off balance sheet investments third parties

     240,072        952        5,333        3,154        507        9,946        2,734        130,889        -       (864     382,776  

Total revenue generating investments

     440,458        83,235        74,354        5,556        1,342        164,487        8,061        130,979        85       (871     743,200  

Investments

                                

Available-for-sale

     77,918        23,044        2,152        660        687        26,544        5,289        87        23       -       109,860  

Loans

     10,820        28,627        -        303        45        28,975        18        -        -       -       39,812  

Financial assets at fair value through profit or loss

     110,906        29,374        66,183        1,436        88        97,080        21        4        62       (7     208,066  

Investments in real estate

     743        1,238        686        3        15        1,942        -        -        -       -       2,685  

Total investments on balance sheet

     200,387        82,283        69,021        2,401        834        154,540        5,328        90        85       (7     360,423  
   

Investments in joint ventures

     7        877        -        -        495        1,373        134        99        -       -       1,614  

Investments in associates

     95        21        8        2        -        30        21        125        (1     -       270  

Other assets

     31,003        15,260        12,718        293        170        28,426        3,122        293        31,107       (30,338     63,627  

Consolidated total assets

     231,493        98,441        81,747        2,696        1,500        184,370        8,604        607        31,192       (30,345     425,935  

 

Unaudited

  LOGO


 

14

 

 

 

4. Premium income and premiums paid to reinsurers

 

                                  

EUR millions

     2Q 2017        2Q 2016        YTD 2017        YTD 2016  
     

Premium income

               

Life insurance

     5,058          4,975          9,890          9,874    

Non-life insurance

     712          727          1,590          1,664    

Total premium income

     5,770          5,702          11,479          11,538    

Accident and health insurance

     619          615          1,402          1,390    

General insurance

     93          112          187          273    

Non-life Insurance premium income

     712          727          1,590          1,664    
     

Premiums paid to reinsurers 1

               

Life insurance

     1,062          757          1,813          1,403    

Non-life insurance

     59          63          120          131    

Total premiums paid to reinsurers

     1,121          820          1,933          1,534    

Accident and health insurance

     56          60          114          124    

General insurance

     3          3          6          7    

Non-life Insurance paid to reinsurers

     59          63          120          131    

1 Premiums paid to reinsurers are recorded within Benefits and expenses in the income statement – refer to note 9 - Benefits and expenses.

Premium income Life includes EUR 1,420 million for 2Q 2017 and EUR 2,193 million for YTD 2017 (2Q 2016: EUR 1,317 million, YTD 2016 EUR 2,118 million) of premiums related to insurance policies upgraded to the retirement platform in the UK.

5. Investment income

 

                                  

EUR millions

     2Q 2017        2Q 2016        YTD 2017        YTD 2016  
     

Interest income

     1,512          1,562          3,148          3,269    

Dividend income

     458          481          650          675    

Rental income

     33          30          68          64    

Total investment income

     2,002          2,073          3,866          4,008    
     

Investment income related to general account

     1,365          1,374          2,828          2,867    

Investment income for account of policyholders

     638          699          1,037          1,141    

Total

     2,002          2,073          3,866          4,008    

6. Income from reinsurance ceded

The income from reinsurance ceded increased by EUR 1.0 billion in 2Q 2017 compared to 2Q 2016. This is mainly the result of the new reinsurance transaction related to the pay out annuity business and BOLI/COLI. Due to the transaction the liabilities for insurance contracts increased by EUR 0.9 billion resulting from loss recognition and then were ceded to a reinsurance company. The loss recognition is reflected in the benefits and expenses line (within claims and benefits) and is offset by an equal increase in the income from reinsurance ceded. As a result there is a nil net impact in the income statement. For more details on the divestment of these businesses refer to note 26 Acquisitions/divestments.

 

LOGO   Unaudited


 

 

Condensed Consolidated Interim Financial Statements 2Q 2017  

 

 

15  

 

 

7. Results from financial transactions

 

                                  

EUR millions

     2Q 2017        2Q 2016        YTD 2017        YTD 2016  
     

Net fair value change of general account financial investments at FVTPL other than derivatives

     58          7          84          (65)   

Realized gains /(losses) on financial investments

     143          228          220          281    

Gains /(losses) on investments in real estate

     26          8          50          26    

Net fair value change of derivatives

     (852)         (272)         (1,296)         166    

Net fair value change on for account of policyholder financial assets at FVTPL

     3,269          4,865          10,267          6,462    

Net fair value change on investments in real estate for account of policyholders

     8          (33)         15          (25)   

Net foreign currency gains /(losses)

     (10)         7          (7)         24    

Net fair value change on borrowings and other financial liabilities

     (4)         6          -          (3)   

Realized gains /(losses) on repurchased debt

     (1)         1          (1)         1    

Total

     2,637          4,817          9,332          6,867    

The decrease of the net fair value change on for account of policyholder financial assets at FVTPL in 2Q 2017 compared to 2Q 2016 is mainly driven by equity markets and interest rate movements.

Net fair value change on for accounts of policyholder financial assets at FVTPL is offset by amounts in the Claims and benefits line reported in note 9 - Benefits and expenses.

8. Other income

Other income of EUR 318 million in the second quarter of 2017 mainly related to a book gain of EUR 231 million (USD 250 million) related to the divestment of the payout annuity business and the Bank Owned Life Insurance / Corporate Owned Life Insurance business (BOLI/COLI) in the US. For more details on the divestment of these businesses refer to note 26 Acquisitions/divestments. Furthermore, a release of an expense reserve of EUR 82 million (GBP 71 million) was recorded that was embedded in the liabilities for insurance contracts following the completion of the Part VII transfer to Rothesay Life. For more details on the completion of the Part VII transfer to Rothesay Life refer to note 24 Assets and Liabilities held for sale and note 26 Acquisitions/divestments.

9. Benefits and expenses

 

                                  

EUR millions

     2Q 2017        2Q 2016        YTD 2017        YTD 2016  
     

Claims and benefits

     11,662          13,047          25,845          23,088    

Employee expenses

     569          559          1,159          1,155    

Administration expenses

     379          320          719          631    

Deferred expenses

     (260)         (311)         (521)         (634)   

Amortization charges

     191          208          395          484    

Total

     12,541          13,823          27,596          24,724    

The following table provides an analysis of “claims and benefits”:

 

                                  

EUR millions

     2Q 2017        2Q 2016        YTD 2017        YTD 2016  
     

Benefits and claims paid life

     5,493          5,413          11,723          10,124    

Benefits and claims paid non-life

     496          530          1,000          1,068    

Change in valuation of liabilities for insurance contracts

     5,319          5,449          10,798          8,449    

Change in valuation of liabilities for investment contracts

     (1,437)         111          (976)         394    

Other

     (13)         (10)         (23)         (15)   

Policyholder claims and benefits

     9,858          11,493          22,523          20,020    

Premium paid to reinsurers

     1,121          820          1,933          1,534    

Profit sharing and rebates

     6          4          12          11    

Commissions

     676          729          1,377          1,524    

Total

     11,662          13,047          25,845          23,088    

 

Unaudited

  LOGO


 

16

 

   

 

The lines “change in valuation of liabilities for insurance contracts” and “change in valuation of liabilities for investment contracts” reflect changes in technical provisions resulting from net fair value changes on for account of policyholder financial assets at fair value through P&L included in Results from financial transactions (note 7) of EUR 3,269 million (2Q 2016: EUR 4,865 million). In addition, the line “change in valuation of liabilities for insurance contracts” includes a decrease of technical provisions for life insurance contracts of EUR 161 million (2Q 2016: increase of EUR 1,163 million).

10. Impairment charges/(reversals)

 

                                  

EUR millions

     2Q 2017        2Q 2016        YTD 2017        YTD 2016  
     

Impairment charges / (reversals) comprise:

               

Impairment charges on financial assets, excluding receivables

     11          34          28          79    

Impairment reversals on financial assets, excluding receivables

     (14)         (12)         (19)         (17)   

Impairment charges / (reversals) on non-financial assets and receivables

     -          (2)         1          (2)   

Total

     (3)         20          10          60    
     

Impairment charges on financial assets, excluding receivables, from:

               

Shares

     -          -          -          1    

Debt securities and money market instruments

     5          11          11          39    

Loans

     6          10          14          13    

Other

     -          9          -          19    

Investments in associates

     -          3          2          7    

Total

     11          34          28          79    
     

Impairment reversals on financial assets, excluding receivables, from:

               

Debt securities and money market instruments

     (10)         (7)         (11)         (8)   

Loans

     (4)         (5)         (7)         (9)   

Other

     (1)         -          (1)         -    

Total

     (14)         (12)         (19)         (17)   

11. Investments

 

             
EUR millions    June 30, 2017                 Dec. 31, 2016
     

Available-for-sale (AFS)

   92,842     109,860  

Loans

   38,780     39,812  

Financial assets at fair value through profit or loss (FVTPL)

  

6,896  

 

5,142  

Financial assets, for general account, excluding derivatives

   138,519     154,814  

Investments in real estate

  

2,026  

 

1,999  

Total investments for general account, excluding derivatives

   140,544     156,813  

 

LOGO   Unaudited


 

 

Condensed Consolidated Interim Financial Statements 2Q 2017  

 

 

17  

 

 

 

Financial assets, for general account, excluding derivatives

 

 
   
EUR millions    AFS      FVTPL      Loans      Total  
   

Shares

     975          592          -          1,567    

Debt securities

     83,578          3,851          -          87,429    

Money market and other short-term investments

     7,156          313          -          7,470    

Mortgages loans

     -          -          33,258          33,258    

Private loans

     -          -          3,285          3,285    

Deposits with financial institutions

     -          -          134          134    

Policy loans

     -          -          2,006          2,006    

Other

     1,133          2,140          97          3,370    

June 30, 2017

     92,842          6,896          38,780          138,519    
   
      AFS      FVTPL      Loans      Total  
   

Shares

     824          490          -          1,314    

Debt securities

     101,054          2,115          -          103,169    

Money market and other short-term investments

     6,776          317          -          7,093    

Mortgages loans

     -          -          34,206          34,206    

Private loans

     -          -          3,166          3,166    

Deposits with financial institutions

     -          -          129          129    

Policy loans

     -          -          2,207          2,207    

Other

     1,206          2,219          104          3,529    

December 31, 2016

     109,860          5,142          39,812          154,814    

The decrease of EUR 16.3 billion in financial assets, for general account, excluding derivatives compared to December 31, 2016 is mainly driven by the disposal of debt securities related to the divestment of the payout annuity business and Bank Owned Life Insurance / Corporate Owned Life Insurance business (BOLI/COLI) in the Americas next to currency translation adjustments.

12. Investments for account of policyholders

 

             
EUR millions    June 30, 2017                 Dec. 31, 2016
     

Shares

   24,910     25,492  

Debt securities

   27,444     30,305  

Money market and short-term investments

   1,882     1,231  

Deposits with financial institutions

   2,386     2,951  

Unconsolidated investment funds

   138,290     140,077  

Other

  

2,697  

 

2,868  

Total investments for account of policyholders at fair value
through profit or loss, excluding derivatives

   197,609     202,924  

Investment in real estate

  

669  

 

686  

Total investments for account of policyholders

   198,278     203,610  

13. Reinsurance assets

Reinsurance assets increased by EUR 8.7 billion compared to December 31, 2016 mainly due to the divestment of the payout annuity business and the Bank Owned Life Insurance / Corporate Owned Life Insurance business (BOLI/COLI) in the US. For more details on the divestment of these businesses refer to note 26 Acquisitions/divestments.

14. Derivatives

The movements in fair value of derivatives on both the asset and liability side of the condensed consolidated statement of financial position mainly result from changes in interest rates and other market movements during the period, as well as purchases, disposals and maturities. The divestment of the payout annuity business and Bank Owned Life Insurance / Corporate Owned Life Insurance (BOLI/COLI) business in the Americas contributed to the decrease of derivative assets with EUR 259 million compared to December 31, 2016.

 

Unaudited

  LOGO


 

18

 

 

 

15. Fair value

The following tables provide an analysis of financial instruments recorded at fair value on a recurring basis by level of the fair value hierarchy:

 

 

Fair value hierarchy

 

                               
   
EUR millions    Level I      Level II      Level III      Total  
     

As at June 30, 2017

               

 

  Financial assets carried at fair value

               

  Available-for-sale investments

               

 Shares

     165          286          524          975    

 Debt securities

     26,808          55,219          1,551          83,578    

 Money markets and other short-term instruments

     -          7,156          -          7,156    

 Other investments at fair value

     -          399          734          1,133      

  Total Available-for-sale investments

     26,972          63,061          2,809          92,842    

 

  Fair value through profit or loss

               

 Shares

     332          121          139          592    

 Debt securities

     1,822          2,024          5          3,851    

 Money markets and other short-term instruments

     -          313          -          313    

 Other investments at fair value

     2          882          1,256          2,140    

 Investments for account of policyholders 1

     118,098          77,747          1,765          197,609    

 Derivatives

     56          6,988          103          7,148    

  Total Fair value through profit or loss

     120,310        88,075          3,268          211,653    

  Total financial assets at fair value

     147,282          151,136          6,077          304,495    

 

  Financial liabilities carried at fair value

               

 Investment contracts for account of policyholders 2

     -          41,042          185          41,228    

 Borrowings 3

     -          570          -          570    

 Derivatives

     33          6,170          2,092          8,294    
  Total financial liabilities at fair value      33          47,782          2,277          50,092    

Fair value hierarchy

 

                               
EUR millions    Level I      Level II      Level III      Total  
     
  As at December 31, 2016                

 

  Financial assets carried at fair value

               
  Available-for-sale investments                
 Shares      119          312          393          824    
 Debt securities      29,386          69,702          1,966          101,054    
 Money markets and other short-term instruments      -          6,776          -          6,776    
 Other investments at fair value      -          453          754          1,206    
  Total Available-for-sale investments      29,504          77,243          3,112          109,860    

 

  Fair value through profit or loss

               
 Shares      288          152          50          490    
 Debt securities      27          2,082          6          2,115    
 Money markets and other short-term instruments      -          317          -          317    
 Other investments at fair value      1          961          1,257          2,219    
 Investments for account of policyholders 1      125,997          75,202          1,726          202,924    
 Derivatives      41          8,169          108          8,318    
  Total Fair value through profit or loss      126,355          86,883          3,146          216,384    
  Total financial assets at fair value      155,860          164,126          6,259          326,244    

 

  Financial liabilities carried at fair value

               
 Investment contracts for account of policyholders 2      -          42,627          176          42,803    
 Borrowings 3      -          610          -          610    
 Derivatives      64          6,347          2,467          8,878    
  Total financial liabilities at fair value      64          49,584          2,643          52,290    

1 The investments for account of policyholders included in the table above represents only those investments carried at fair value through profit or loss.

2 The investment contracts for account of policyholders included in the table above represents only those investment contracts carried at fair value.

3 Total borrowings on the statement of financial position contain borrowings carried at amortized cost that are not included in the above schedule.

 

LOGO   Unaudited


 

 

Condensed Consolidated Interim Financial Statements 2Q 2017  

 

 

19  

 

 

Significant transfers between Level I, Level II and Level III

Aegon’s policy is to record transfers of assets and liabilities between Level I, Level II and Level III at their fair values as of the beginning of each reporting period.

The table below shows transfers between Level I and II for financial assets and financial liabilities recorded at fair value on a recurring basis during the six month period ended June 30, 2017.

 

 

Fair value transfers

                          
EUR millions    YTD 2017     Full Year 2016
      Transfers
Level I to 
Level II 
    Transfers
Level II to
Level I 
        Transfers
      Level I to
Level II
   

Transfers
Level II to

Level I

Financial assets carried at fair value
 Available-for-sale investments
            
Debt securities            -           69 
 Total            -           69 

 

 Fair value through profit or loss

            
Investments for account of policyholders            8           (1)
 Total            8           (1)
 Total financial assets at fair value            9           68 

Transfers are identified based on transaction volume and frequency, which are indicative of an active market.

Movements in Level III financial instruments measured at fair value

The following table summarizes the change of all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (‘Level III’), including realized and unrealized gains (losses) of all assets and liabilities and unrealized gains (losses) of all assets and liabilities still held at the end of the respective period.

 

 

Roll forward of Level III financial instruments

 

 

EUR millions    January
1, 2017
     Total gains /
losses in
income
statement 1
    Total gains /
losses in OCI 2
    Purchases      Sales      Settlements      Net
exchange
differences
     Reclassification      Transfers
from
Level I
and
Level II
     Transfers
to Level I
and
Level II
     June 30,
2017
    

 

Total unrealized gains
and losses for the
period recorded in the
P&L for instruments
held at

June 30, 2017 ³

 

  Financial assets carried at fair value available-for-sale investments

                                   

 Shares